Who Pays Texas Taxes?

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Chandra Villanueva /(512) 320-0222 x 107

September 25, 2012

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There has recently been a lot of attention focused on who pays the taxes that are necessary to support our public services. On the federal level, the discussion has been about the federal income tax and payroll taxes for Social Security and Medicare. In Texas, the two major taxes are the sales tax, which provides more than half of all state tax revenue, and the local property tax, which is a major support for schools, cities, counties, and community colleges.

Just about every family in Texas pays both taxes. The sales tax is owed on most purchases that a family makes (except for groceries, medicine, and residential utilities). The property tax is paid by both homeowners and by renters, whose landlord initially pays the tax, but passes the cost on to them as part of the rent charged. And, of course, taxes paid initially by business are passed on to consumers through higher prices, to workers through lower wages, or to owners through lower profits.